Turbine Edition: Market WatchTurbine Edition: Market Watch

VLJ update: A realistic picture of a changing marketVLJ update: A realistic picture of a changing market

October 1, 2008

Shakeout may be a mild characterization of the once populous field known as Very Light Jets. Adam Aircraft, manufacturer of the certified A-500 tandem piston twin and the prototype A-700 twin jet, declared Chapter 7 bankruptcy and its assets were sold to Russian investors for an undisclosed price rumored to be just north of $10 million.

Shakeout may be a mild characterization of the once populous field known as Very Light Jets. Adam Aircraft, manufacturer of the certified A-500 tandem piston twin and the prototype A-700 twin jet, declared Chapter 7 bankruptcy and its assets were sold to Russian investors for an undisclosed price rumored to be just north of $10 million. After initiating flight tests of its twin jet mini-F-18 lookalike, the Javelin, and anticipating a strong market for a new generation of military trainers as well as demand from sports aviators who sought truly high performance, Advanced Technology Group also declared Chapter 7 bankruptcy in 2008. These companies were the latest to join more than a dozen designs that have flown off to VLJ Valhalla.

While it’s disappointing that so many interesting designs will never come to fruition, we should not be surprised. Producing a new aircraft is a difficult, costly, and time-consuming task that requires a strong grasp of the art and science of aircraft certification and manufacturing. Many VLJ programs were initiated by companies that had no previous experience in the field. Also, success with certificating a prop design does not make the road to a jet approval smooth, since FAA criteria differ between turbojets and piston-powered aircraft. Companies such as Cessna and Embraer have the aviation wisdom honed by years of experience to establish realistic price points and delivery schedules, whereas newcomers often are simply long on enthusiasm and hope.

Nor should we have been taken in by one of the basic gambits of marketing: creating a new product class and then claiming primacy in that class. Turbojet aircraft weighing 10,000 pounds or less are not new. They are simply the latest iteration of entry-level jets made possible by evolutionary advances in engine design, lower-cost avionics, and impressive manufacturing techniques. By the definition of marketers who championed the product class as new, the Morane-Saulnier MS 760 Paris Jet, which had a maximum gross takeoff weight of 8,820 pounds and received its FAA type approval on July 3, 1958, was a VLJ. While the first to enter production as a certificated aircraft, the MS-760 followed by a decade another French design, the Sud Aviation So 6000 Triton, which had a wingspan of 33 feet and weighed about 10,000 pounds. The diminutive research aircraft, which flew on Armistice Day, November 11, 1946, was France’s initial foray in jet-powered aircraft.

Bright skies remain

Another myth was that this new class of aircraft would darken the skies as air taxi firms developed innovative forms of on-demand air transportation based upon VLJs and as owner pilots left their sophisticated singles and light twins for the benefits of jets. Eclipse’s former president and CEO Vern Raburn spoke of producing 1,000 Model 500s per year by 2008, and DayJet in Florida planned for a vast network of Eclipse 500s operating a per-seat air taxi system serving the Southeast initially, and eventually other regions of the nation. Pundits cautioned that doctors, dentists, and other nonprofessional aviators would lack the training to operate safely at jet altitudes alongside of airlines and corporate jets. Multiple schemes for training, insuring, and mentoring the new owners of VLJs surfaced.

Last year Eclipse completed a few more than 100 aircraft, and has said it will manufacture between 250 and 300 units this year. The company should be complimented for achieving such success. Even with the additional funds available to Eclipse because of partnering with financially healthy ETIRC (European Technology and Investment Research Center)—a European technology company with deep pockets—producing a jet aircraft is not easy.

DayJet operates a fleet of 28 Model 500 Eclipses, of which about half are in passenger service and the rest are involved in various activities such as crew training and standby readiness. Growth of the DayJet’s per-seat air taxi system has been slowed by difficulty in acquiring needed financing in today’s economy, by challenges of being an early adopter of a new aircraft design (many of Eclipse’s proposed avionics advances are yet to be available), and by the inefficiency of the ATC system. These difficulties have prompted DayJet to cancel orders for Eclipses for the time being.

LinearAir, based in Bedford, Massachusetts, and successfully operating four Eclipse 500s in addition to several Cessna Caravans, and North American Jet, a Chicago-based operator that added five Eclipse aircraft to a fleet of several business jets and turboprops, have found market acceptance of the VLJ in traditional charter service. (North America Jet recently expanded its operation to include charter flights from Florida to the Bahamas.)

The transportation model envisioned by DayJet and by others who embraced the possibilities of per-seat, high-frequency air transportation to secondary and tertiary markets explored by NASA in its Small Aircraft Transportation System (SATS) research has yet to materialize. Even DayJet is accepting more whole-aircraft charter business to augment its cash flow as it awaits demand to build.

In yet another example that VLJs have not rearranged general aviation, insurance companies issue policies using protocols that have been in place since single-pilot Citations became available decades ago. Except for screening of applicants prior to initiating their transition to VLJs, training procedures also remain essentially unchanged.

Enter the PLJ

The Personal Light Jet, which I loosely define as an aircraft with a maximum takeoff weight at or below 5,500 pounds, a maximum ceiling of 29,000 feet or lower, and typically powered by a single turbofan, has surfaced. Two models immediately come to mind, but more are either on the drawing boards or have flown. With its eye on 2010 certification, Cirrus Design is flight testing its Vision SJ50, a seven-seat aircraft powered by a single Williams FJ33-4A-19 turbofan producing 1,900 pounds of thrust. Diamond Aircraft is flying three D-Jets, two of which are engaged in certification flight tests that are expected to earn the five-seat aircraft FAA approval in 2009. Like the Cirrus Vision, the D-Jet is powered by a single Williams FJ33, will operate at or below 25,000 feet, and will employ a recovery parachute system.

Eclipse announced it will produce the Model 400, a four-place single-engine jet weighing about 4,500 pounds at takeoff. Unlike the Cirrus or Diamond jets, Eclipse anticipates a maximum altitude of 41,000 feet. Epic Aircraft, based in Bend, Oregon, is flying its Epic Victory, which began life powered by a single Williams FJ33 turbofan but anticipates certification using the Pratt & Whitney PW600 series. Excel-Jet suffered a major setback when its single-engine jet, the Sports-Jet, crashed on takeoff upon encountering wake turbulence from a departing turboprop. Piper Aircraft’s single-engine jet, aptly named the PiperJet, is larger, faster, and more expensive than other aircraft in its class, in part because of its use of the Williams FJ44-3AP turbofan. Stratos Aircraft, also of Bend, entered the PLJ arena with the Stratos 714, a four-place single powered by a Williams FJ44-3AP and constructed from composite materials.

Advances in aviation have always been paced by advances in powerplants. Turbofan engines have demonstrated their reliability and their ability to enhance the performance of most all aircraft classes. Thus the emergence of the new PLJs was inevitable. It remains to be seen, however, if the shakeout in PLJs will follow the path of VLJs.

John W. Olcott owns General Aero Company, is a 10,000-hour ATP, and is a former president of the National Business Aviation Association (NBAA).